Former Bureaucrats Urge Finance Commission to Double 'Green Bonus' for Himalayan States

A group of 103 former bureaucrats, under the banner of the Constitutional Conduct Group, has written to Arvind Panagariya, the Chairman of the 16th Finance Commission. They are advocating for a significant increase in the 'Green Bonus,' a component used by the Finance Commission to allocate funds to states for environmental services. The demand is to raise this allocation from the current 10% to 20% for Himalayan states like Jammu and Kashmir, Himachal Pradesh, Uttarakhand, and Sikkim.

The former officials emphasize that these states are severely impacted by climate change, facing frequent cloudbursts, flash floods, and landslides, which damage infrastructure. They argue that the ecological services provided by the Himalayas – forests, glaciers, and rivers – are vital for the survival of North India and the Indo-Gangetic plains, sustaining approximately 400 million people. However, these regions rely heavily on their natural resources, leading to their exploitation for hydroelectric projects and tourism, resulting in significant deforestation.

The group pointed out that Himachal Pradesh and Uttarakhand have lost thousands of hectares of forest land to non-forestry projects in the last two decades. They contend that the current 10% weightage for forests and ecosystem services in fund allocation is insufficient and discourages conservation. They also suggest rebalancing other allocation indicators, such as reducing the weightage for 'population' and 'income gap,' and including areas above the tree line (snowfields, alpine meadows, glaciers) in the definition of forests for ecological calculations.

The People for Himalayas campaign supported the demand but stressed that it should lead to structural reforms in mountain governance and resource management, not just financial compensation. They also called for strong environmental regulations to prevent unsustainable development disguised as 'green growth'.

Impact: This news could influence government policy regarding fiscal allocations for environmental conservation and state development. It may indirectly impact sectors such as hydropower, tourism, and infrastructure development in ecologically sensitive regions. A potential increase in 'Green Bonus' could lead to greater investment in sustainable practices and green infrastructure, affecting companies operating in these areas and their environmental, social, and governance (ESG) profiles. Investors might pay more attention to companies with strong environmental credentials in regions benefiting from such policies. Rating: 5

Difficult terms: Finance Commission: A constitutional body in India that advises on the distribution of financial resources between the Union government and the states. Green Bonus: A financial allocation or incentive provided to states for maintaining and providing ecological services, such as forests, clean water, and climate regulation. GLOFs (Glacier Lake Outburst Floods): Sudden and violent floods caused by the collapse of natural dams holding back glacial lakes. Indo-Gangetic Plains: A large, fertile plain in northern India and Bangladesh, formed by the Indus, Ganges, and Brahmaputra river systems, crucial for agriculture. Eco-Sensitive Zone/Protected Zone: Areas designated by governments for special protection due to their ecological importance, biodiversity, and potential environmental risks.